I decided to rewrite the vista volume library to produce real sound events. This will only work for Vista and 7 (and the like) so no XP. You should get events whenever the volume level changes and for mute/unmute for the default playback device. It also works even if you change the default playback device. I've been using for a few days now and it seems to be rock solid.
Take the two files from this zip and place in the eventghost\plugins\system directory and restart EG.
UPDATE: updated files can be found in later post below
